Baby Boomer Data: Hawaii 2000

 

 

Harumi S. Karel, PhD, Kathryn L. Braun, DrPH., and Virginia Tanji, MSLS., recently completed a study examining the situation of baby boomers in Hawaii by compiling available government and non-government information.  The study was funded by the Executive Office on Aging and the report titled “Baby Boomers Data: Hawaii 2000” has been published.

 

The following is the executive summary of the report, Baby Boomers Data: Hawaii 2000.

 

 

EXECUTIVE SUMMARY

Background

Hawaii’s elderly population is growing, and is growing much faster than the nation as a whole. Consider:

• Residents 60 and older comprised 16% of our population in 1990. By 2020, the number of residents 60+ will have doubled over 1990, to represent 25% of the population.
• The population 65 and older (those eligible for Social Security and Medicare) will more than double in number. They comprised 11% of the total population in 1990, but will account for 18% in 2020. If military personnel and their dependents are excluded from the projections, the population 65 and older will account for 20% of the state’s population in 2020.
• Residents 85 and older (those most in need of institutional, community, and in-home services due to high levels of disability, both mental and physical) comprised 1% of our total population in 1990. By 2020, the number of residents 85+ will have more than tripled, to represent 2.6% of the total population.

Why is the elderly population growing so quickly? Much of the growth is due to the aging of the baby boomers, the massive population blip attributable to high birth rates from 1946 through 1965. In fact:

• By 2011, the first boomers will reach the conventional retirement age of 65.
• By 2030, all baby boomers will be 65 years old and older.

The societal impact of graying baby boomers has been the subject of speculation and debate by U.S. policy makers, economists, and other professionals. Reasons why the aging boomer population is a major concern include: 1) the swiftness of the increase of the population; 2) the prolonged life expectancy resulting in a prolonged duration of "old age;" 3) current changes in family structures and the impact of these changes on the ability of the family to care for its older members; and 4) changing notions about social and public responsibility for supporting this increasing number of older Americans.

In general, the U.S. baby boomer cohort is thought to have a higher standard of living than the previous generations. Boomers have altered traditional family structures by marrying late and having fewer children, and frequently ending marriages and entering into new relationships. They are also thought to spend more than they save.

As the “baby boom” turns into the “senior boom,” Hawaii policy makers may want to consider these questions:

• What is a typical baby boomer in Hawaii?
• How do Hawaii’s baby boomers compare to the previous generation (i.e., Hawaii’s current seniors citizens)? How do Hawaii’s baby boomers compare to U.S. baby boomers as a whole?
• What else do we know about baby boomers that can give us some ideas about their future needs and desires?
• When Hawaii’s boomers are senior citizens, what demands will they place on government?

To begin to answer these questions this report presents a combination of current and projected data about Hawaii’s baby boomers. Their characteristics are compared with those of their parent’s generation and with those of baby boomers in the U.S. as a whole. The report then speculates about what types of assistance baby boomers may need when they enter "old age."

Findings

What is a typical baby boomer in Hawaii? Existing data from a number of federal and state sources suggest that:

The typical boomer in Hawaii is an Asian or Pacific Islander and a high school graduate (only 27% are college graduates). He/she most likely lives in a family household, having married at around age 30. He/she has a job and his/her family income is about $40,000. The typical boomer wears seatbelts, does not smoke or drink, and is not overweight. If this boomer were to die, he/she would be likely to die from cancer, heart disease, or injury, but the majority of boomers can expect to live another 25-45 years. He/she does not own a home (only 41% do). His/her parents are still living, and the boomer may expect to inherit property or income from them.

Although there is no specific data available for Hawaii boomers, national data suggest that our typical boomer is not saving regularly for retirement (only 42% are) and is not participating in a pension plan (only 44% are).

How do Hawaii’s baby boomers compare to the previous generation (i.e., Hawaii’s current senior citizens)? How do they compare with U.S. baby boomers as a whole? Existing data from a number of federal and state sources suggest Hawaii baby boomers:

• will live longer than today’s senior citizens,
• have more formal education than today’s senior citizens,
• have higher median family and household incomes than today’s senior citizens (although the cost of living is much higher today than it was 20-40 years ago),
• have fewer children than their parent’s generation,
• have higher rates of divorce and remarriage than their parent’s generation,
• if female, are more likely to participate in the labor force than their mothers,
• are less likely to own a home than their parents, and
• are much more likely to smoke, drink, and be overweight than their parent’s generation.

In comparison to U.S. Boomers as a whole, Hawaii baby boomers:

• will live longer than mainland boomers,
• have more formal education than mainland boomers,
• have less children than mainland boomers,
• have higher rates of divorce and remarriage than mainland boomers,
• have a higher median family income than boomers on the mainland (although the cost of living in Hawaii is higher than on the mainland),
• if female, are more likely to participate in the labor force than female boomers on the mainland,
• are less likely to own their own home than boomers on the mainland, and are less likely to smoke, more likely to drink, and more likely to use seatbelts than mainland boomers.

As far as their retirement plan is concerned, many boomers are not saving for retirement. A survey by the American Association for Retired People (AARP) found that only 42% reported saving regularly for retirement and that boomers did not have a large store of assets. Excluding house equity, leading-edge boomers (those born 1946-1955) had only $18,000 in assets while trailing-edge boomers (those born 1956-1964) had only $7,000 in assets. According to Merrill Lynch, the retirement saving adequacy of baby boomers (all households) in 1996 was 35.9%, suggesting that baby boomers need to save three times more for retirement than they’re now saving (Bernheim, 1997).

Baby boomers report in a number of surveys that they expect Medicare and Medicaid will cover their health and long-term care costs as they age. In fact, U.S. health care costs for adults 65+ are projected to increase from $31 billion in 1994 to $665 billion in 2030, an increase of over 2000%. In Hawaii, long-term care costs, including costs of nursing homes and home care services, will increase from $181 million in 1990 to $2,050 million in 2020, an increase of over 1000%. Can public insurance programs cover all these costs? Don’t people have private insurance? Surprisingly, it is projected that less than 10% of Hawaii’s population will have private long-term care insurance by 2020. Mainland studies have found that long-term care insurance is the payer for only 1% of long-term care costs.

Hawaii’s baby boomers will face added burden due to the higher dependency ratio than the mainland. The dependency ratio is the ratio of adults 65+ to working-age adults. Hawaii’s dependency ratio will increase from 21.5 older adults per 100 working-age adults in 1995 to 30 older adults to 100 working-age adults in 2020. Thus, Hawaii will have a shrinking number of working-age adults (who contribute to the tax base) trying to support a growing number of adults 65+(who use many of the services supported by state and federal taxes).

In addition, Hawaii’s parent’s support ratio (the ratio of adults 85+ per adults 50-64, who are most likely to be family caregivers) will increase from 8.7 adults 85+ per 100 family caregivers in 1995 to 15.7 adults 85+ per 100 family caregivers in 2020. Thus, Hawaii will have a shrinking number of middle-aged adults trying to support a growing number of adults 85+ (who are most likely to be disabled, frail, or vulnerable).

Implications for Government

The data presented in this report suggest that Hawaii state government will need to consider new ways of delivering and financing services as “baby boomers” become “senior boomers.” Given the expected diversity among the 18-year cohort of boomers, implications are discussed for two groups of aged boomers; 1) those who are healthy and active and 2) those who are disabled, frail, or vulnerable.

• Healthy and Active Aged “Senior Boomers”

Hawaii baby boomers are less likely to accept the status quo and are used to having more independence than their parent’s generation. Upon retirement, we can expect these boomers to continue to exercise their freedom of choice and to demand goods and services they believe are due to them. This group of seniors will present challenges and opportunities to a number of areas of government responsibility and concern:

·         Labor and Industry

·         Transportation

·         Taxation

·         Education

·         Leisure Activities

• Disabled, Frail, and Vulnerable “Senior Boomers”

Hawaii baby boomers are generally in good health and will live longer than their parent’s generation, but greater proportions smoke, drink, and are overweight than the current generation of elders. They have smaller and more-scattered families, and many do not own homes. There is a growing segment that are not saving for retirement while, at the same time, the dependence ratio is increasing (meaning that fewer young people are available to work and contribute to the tax base that supports income-maintenance, health, and social service programs). Thus the number of elders who are disabled, frail, and vulnerable will increase as the number of family and tax-dependent supports decreases. This group of seniors will present challenges to a number of areas of government responsibility and concern:

·        Income Maintenance

·        Transportation

·        Housing

·        Consumer protection

·        Prisons

·        Health and Social Services

·        Long-Term Care

 

If you would like to obtain the report, please contact:

Executive Office on Aging
No.1 Capitol District
250 S. Hotel St., Suite 109
Honolulu, Hawaii 96813-2831
Tel: 808-586-0100

 

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